Florida Contemplates Fee Sharing with Out of State NonLawyers

A proposed advisory opinion by The Florida Bar’s Professional Ethics Committee addresses fee-splitting with out-of-state lawyers when the out-of-state lawyer practices in a law firm with nonlawyer ownership. In the opinion, the committee states that a Florida Bar member should not be subject to discipline simply because a nonlawyer owner of an out-of-state law firm could receive a portion of the legal fees.

Partnerships with out-of-state lawyers are hardly new, but tensions between Florida’s Rules of Professional Conduct, and the organization and ownership of out-of-state-firms led the Florida Bar to clarify the matter.

Under Florida Rule of Professional Conduct 4-5.4, lawyers are prohibited from partnering or sharing legal fees with a nonlawyer. However, some U.S. jurisdictions—Washington, D.C. and Washington state—permit nonlawyer ownership of law firms.

The Florida Bar proposed advisory opinion follows in the footsteps of ABA Formal Opinion 464, and several other jurisdictions, in deciding that nonlawyer ownership of law firms in jurisdictions where permissible should not cause collaborating Florida lawyers to violate the prohibition against fee sharing set forth in Rule 4-5.4.

The underlying policy of Rule 4-5.4  concerns the improper influence of a nonlawyer may on a  lawyer’s professional judgment. However in the scenario analyzed in the proposed opinion, Florida Bar committee believes that a lawyer’s professional independence is not at risk simply because a nonlawyer owner receives a portion of an out-of-state lawyer’s fees.

Ultimately, the proposed opinion encourages attorneys to work with out-of-state lawyers despite differences in ownership structure, and allows clients to maintain flexibility in choosing counsel from other jurisdictions. 

To read the proposed opinion please click here.  

From the Florida Bar webpage:

Pursuant to Rule 4(c) and (d) of The Florida Bar Procedures for Ruling on Questions of Ethics, comments from Florida Bar members are solicited on the proposed opinion. The committee will consider any comments received at a meeting to be held in conjunction with The Florida Bar’s Fall Meeting at 9:30 a.m. on Friday, October 13, 2017, at the Tampa Airport Marriott.Comments should be submitted to Elizabeth Clark Tarbert, Ethics Counsel, The Florida Bar, 651 E. Jefferson Street, Tallahassee 32399-2300, and must be postmarked no later than August 15, 2017.

Is Email Encryption the New Reasonable Standard? The ABA Opines

The ever-present threat to data security  in an increasingly digitized legal profession has redefined the  “reasonable efforts” standard for lawyers who handle client information. Nicole Black over at Above the Law offers a good summary of the recently released American Bar Association (ABA)  Formal Opinion 477, which addresses a need for lawyers to increase the security  of electronic communication by using encryption in certain situations to maintain competence and client confidentiality  She also explores New York State Bar Association (NYSBA) updated  Social Media Ethics Guidelines, which acknowledge and address newer state opinions in the realm of social media.

Click on the link below to access Nicole Black’s article from Above the Law and learn more about the potential impact of ABA Formal Opinion 477 and NYSBA’s Social  Media Ethics Guidelines on the legal community.

New Guidelines: ABA On Email And NYSBA On Social Media

Lawyers Reporting Lawyers…Duty to Report in a Government Agency

Recently, the New York State Bar Association Committee on Professional Ethics opined that a government lawyer with knowledge of another government agency lawyer’s ethical violation that questions the lawyer’s fitness to practice law must report the information to a tribunal authorized to investigate the conduct, unless the information is confidential and the agency does not consent to its disclosure.

“Tribunal” is defined by New York Rule 1.0 as “a court, an arbitrator in arbitration proceeding or a legislative body, administrative agency or other body acting in an adjudicative capacity. A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a legal judgment directly affecting a party’s interests in a particular matter.” [Emphasis added.]

If a report to a tribunal or other authority is necessary, the lawyer must determine if the government agency’s ethics office is considered a tribunal or other authority authorized to act upon such violation. If the ethics office is not considered a tribunal or such other authority under these standards, the government lawyer may report initially to the ethics office of the government agency. However, the lawyer may not defer to a decision by the ethics office not to report unless the reporting obligation involves an “arguable question of professional duty” and the decision of the ethics office not to report is a reasonable resolution.

Yet, it’s important to highlight that a mere suspicion of misconduct is not sufficient under Opinion 1120. A lawyer must have knowledge of said misconduct.

To read the opinion click here.

Conflicted? Representing Criminal Defendants When Your Partner Becomes The District Attorney

Recently, the New York State Bar Association (N.Y.S.B.A.) Committee on Professional Ethics held that a lawyer may represent clients in a criminal defense case being prosecuted by the district attorney who was once a partner at the lawyer’s firm given that two conditions are met. The first is that the district attorney must have severed all ties with the firm. The second is that a reasonable lawyer would not conclude there is a significant risk that the lawyer’s professional judgment on behalf of the clients will be adversely affected by the former relationship with the district attorney.

New York Rule 1.7(a)(2) governs the inquiring attorney in this matter. It prohibits a lawyer from representing a client if “a reasonable lawyer would conclude that … there is a significant risk that the lawyer’s professional judgment on behalf of a client will be adversely affected by the lawyer’s … personal interests,” unless, under Rule 1.7(b), the conflict is consentable and the lawyer has obtained consent, confirmed in writing.

The district attorney in this inquiry, as a public official, is governed by Rule 1.11(d)(1), which states, “[e]xcept as law may otherwise expressly provide, a lawyer currently serving as a public officer or employee shall not … participate in a matter in which the lawyer participated personally and substantially while in private practice or nongovernmental employment, unless under applicable law no one is, or by lawful delegation may be, authorized to act in the lawyer’s stead in the matter.”

The committee found that the inquirer must determine whether a reasonable lawyer would conclude that the attorney’s personal relationship with the district attorney would adversely affect the representation of clients in criminal matters for which the district attorney’s office is responsible. The committee reasoned that if the inquirer knows that the district attorney participated personally and substantially in a case while in private practice, the inquirer may explore the provisions of applicable law and may have an obligation to report such information to the tribunal.

To read the entire opinion, click here.


Show Me The Money: Lawyers May Withdraw If Not Paid Fees

The American Bar Association released Formal Opinion 476, which addresses whether a lawyer can withdraw from a civil case because a client failed to pay the lawyer’s fees, without jeopardizing the duty of confidentiality and balancing this with information that the Court would need to consider granting a lawyer’s motion to withdraw. Withdrawal from a case in any instance invokes ABA Model Rule 1.6—Confidentiality of Information—however, lawyers may choose to withdraw from a case under Rule 1.16(b): Declining or Terminating Representation.

Failure to pay a lawyer’s fees is one reason a lawyer may withdraw from a civil litigation matter under 1.16(b)(5). A lawyer cannot go too in-depth and disclose confidential client information in motions for withdrawal, but previous opinions and Comment 16 to Rule 1.6 permit a lawyer to advise the court that “professional considerations” require withdrawing from the case.

Trial court judges also have to be aware of this balancing act between confidentiality and withdrawal because of unpaid fees. Judges have wide discretion in ruling on such motions. Along with considering the lawyer’s reasons, judges must consider the Court’s calendar and how the withdrawal will impact the parties to the case. Withdrawal motions are less problematic in earlier stages of litigation when these factors (along with the reasons the lawyer provides) are considered; when the case is further along and the trial is approaching, it falls more to the judge’s discretion.

In order to avoid breaching confidentiality when withdrawing over unpaid fees, a lawyer could vaguely reference “professional considerations” with no client information and persuade the court that more is not necessary. Or, if needed the lawyer may submit information deemed reasonably necessary by the court to minimize disclosure if it is appropriate. Lawyers and judges must cooperate in order to protect client confidentiality in motions for withdrawal.